Citation Nr: 0738576
Decision Date: 12/07/07 Archive Date: 12/13/07
DOCKET NO. 06-22 187 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Milwaukee,
Wisconsin
THE ISSUE
Entitlement to waiver of recovery of an overpayment of VA
compensation benefits.
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
Patrick J. Costello, Counsel
INTRODUCTION
The veteran served on active duty from November 1945 to
January 1947.
This matter came before the Board of Veterans' Appeals
(Board) from decision of the Committee on Waivers and
Compromises of the Milwaukee, Regional Office (RO). A
hearing was held before the undersigned Veterans Law Judge at
the Chicago RO in August 2007. A transcript of that hearing
was produced and has been included in the claims folder for
review.
FINDINGS OF FACT
1. From 2001 to 2004, the veteran received a nonservice-
connected pension.
2. The veteran received additional dependency benefits for
his son who has been ruled to be a helpless child.
3. For 2001 to 2004, the veteran received pension benefits
for which he was not entitled thereto since he was receiving
additional income used for the care of his son. An
overpayment in the amount of $15, 004.00 (US dollars) was the
result of the veteran receiving benefits for which he was not
entitled thereto.
4. No fraud, misrepresentation, or bad faith on the part of
the veteran, with respect to the creation of the debt, has
been evidenced.
5. The veteran's apparent source of income is in the form of
his VA pension benefits, his Social Security Administration
benefits, and $300.00 a month he receives for the care of his
son.
6. Per the veteran's financial status report, the veteran's
monthly income is approximately $1092.50 (US dollars).
7. Repayment of the overpayment may cause undue hardship.
CONCLUSIONS OF LAW
1. Waiver of recovery of the overpayment of VA improved
pension benefits in the amount of $15,004.00 (US dollars) is
not statutorily precluded. 38 U.S.C.A. § 5302(a) (West
2002).
2. The recovery of the overpayment of VA compensation
benefits in the amount of $15,004.00 (US dollars) would be
against equity and good conscience and, therefore, may be
waived. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. §§
1.963(a), 1.965(a) (2007).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
The veteran has come before the Board expressing disagreement
with having to repay an overpayment of pension benefits
funds. The record reflects that the veteran receives $867.50
(US dollars) a month in Social Security Administration (SSA)
benefits and he is paid $300.00 (US dollars) a month for the
care of his dependent son. He has reported that he has
approximately $8,000.00 (US dollars) in savings. With
respect to expenses, the veteran claims that he has expenses
of approximately $700.00 (US dollars) per month. The
veteran's net income has been determined to be $1,092.50 (US
dollars) per month.
The veteran has claimed that it would cause an undue hardship
if he was required to repay the $15,004.00 (US dollars) that
have been already paid to him. He maintains that the monies
he receives for the care of his son are spent on his
dependent disabled son and that he does not use that money
for his personal care. He further contends that his is
legally blind and that he must depend on the charity and care
of others for daily living. He believes that if he was
required to repay the overpayment, he would not be able to
pay his property taxes nor would he be able to cover any
emergency expenses that might occur.
As an initial matter, the Board notes that the present case
involves Chapter 53 of Title 38 of the Unites States Code,
and therefore the duty to notify and assist provisions of the
VCAA do not apply. Barger v. Principi, 16 Vet. App. 132, 138
(2002); see also, 38 U.S.C.A. §§ 5103, 5103A (West 2002 &
Supp. 2006).
Even though the VCAA does not apply, the Board sees that the
RO notified the veteran of the relevant statutes and
regulations in its June 2006 statement of the case (SOC). He
requested a personal hearing in this matter and said hearing
has been accomplished. He has provided written statements in
support of his claim. The Board finds that he has been
adequately notified of the relevant statutes and regulations
and has been given the opportunity to submit any additional
evidence he might have to support his waiver request.
Accordingly, the Board will address the merits of his
request.
In deciding this case on appeal, the initial point worth
reiterating is that the veteran is not challenging the
validity of the debt. Pursuant to 38 U.S.C.A. § 5302(a)
(West 2002), a claimant is allowed to seek a waiver of
recovery of an overpayment of VA benefits. The Secretary of
VA is authorized to grant a waiver of recovery of
indebtedness when collection of the debt would be against
"equity and good conscience." 38 U.S.C.A. § 5302(a) (West
2002); 38 C.F.R. §§ 1.962, 1.963(a) (2007). Under the
criteria set out in 38 U.S.C.A. § 5302(c) (West 2002), the
law precludes a waiver of recovery of an overpayment or the
collection of any indebtedness where any one of the following
elements is found to exist: (1) fraud, (2)
misrepresentation, or (3) bad faith. 38 U.S.C.A. § 5302(c)
(West 2002); 38 C.F.R. § 1.962(b) (2007). Consequently,
before the Board may determine whether equity and good
conscience affords the veteran a waiver, the Board must first
determine whether there was an indication of fraud,
misrepresentation, or bad faith on his part in connection
with the claim.
Concerning this preliminary determination, the Board agrees
with the RO's decision and finds that the facts in this case
do not reveal the presence of fraud, misrepresentation, or
bad faith on the veteran's part in the creation of the
overpayment in question. There is nothing in the record
suggesting he tried to hide the payments he was receiving for
the care of his son and thus mislead VA. The Board has no
reason to conclude otherwise.
Having determined there was no fraud, misrepresentation, or
bad faith on the veteran's part, the Board may now proceed to
the question of whether the collection of the overpayment
would be against "equity and good conscience." 38 U.S.C.A.
§ 5302(a) (West 2002); 38 C.F.R. § 1.963(a) (2007). Pursuant
to 38 C.F.R. § 1.965 (2007), the standard of equity and good
conscience will be applied when the facts and circumstances
in a particular case indicate a need for reasonableness and
moderation in the exercise of the government's rights. 38
C.F.R. § 1.965(a) (2007). The decision reached should not be
unduly favorable or adverse to either side. Id. The phrase
equity and good conscience means arriving at a fair decision
between the obligor and the government. Id. In making this
determination of whether recovery would be against equity and
good conscience, 38 C.F.R. § 1.965(a) (2007) requires
consideration of each of the following factors, which are not
intended to be all inclusive:
(1) fault of the debtor;
(2) balancing of faults between debtor
and VA;
(3) undue hardship;
(4) whether collection would defeat the
purpose of the benefit;
(5) unjust enrichment; and
(6) whether the debtor changed position
to his own detriment through reliance on
the benefit.
38 C.F.R. § 1.965(a) (2007); see also Ridings v. Brown, 6
Vet. App. 544, 546 (1994).
The above-cited regulation sets forth the various elements to
be considered in reaching a determination in these cases.
The first element pertains to the fault of the debtor and
requires an analysis as to whether the actions of veteran
contributed to the creation of the debt. As outlined in the
above section of this decision, the evidence does indicate
that the veteran did not report the monies he was receiving
for the care of his helpless child son - a sum of $300.00 (US
dollars) a month. As a result, the Board must conclude that
this failure was the significant reason for the creation of
the overpayment in this case.
The second element pertains to the fault on the part of the
VA. The VA is required to balance the fault of the debtor
against any fault of the VA in the creation of the
overpayment. A review of the record fails to indicate that
any fault may be attributed to the VA in the creation of the
overpayment in this case and the veteran does not allege that
the VA committed any fault in the creation of the
overpayment. Accordingly, the Board has determined, in
balancing of the fault of the veteran against the fault of
the VA in this case, that any fault found in this case must
be attributed to the veteran.
It is factor number three which the Board believes relevant
to the veteran's appeal. Specifically, would recovery of the
overpayment cause undue hardship on the veteran. The veteran
has provided a recent Financial Status Report, VA Form 20-
5655. However, from the information provided by the veteran
during his hearing before the Board, it appears that the
veteran was somewhat confused as to what information he was
suppose to provide on that form. Nevertheless, the claims
file contains evidence that would provide insight to the
veteran's present financial situation. The record shows that
the veteran does own his own home. He currently has custody
of his helpless child son. The monies he receives for the
care of his son is used to defray any costs the veteran may
have in providing care and sustenance to his son.
Additionally, he apparently is dependent upon the monies he
receives for SSA benefits and uses those monies for the
purchase of basic necessities, such as food, clothing, and
lodging. The evidence further shows that the veteran is
legally blind and over the age of 80. In light of his
expenses, as well as his poor health, the Board finds that
compelling repayment would result in undue financial
hardship.
The Board notes that the fourth, fifth and sixth elements
preponderate against the veteran's claim. Recovery of the
benefits would not nullify the objective for which benefits
were intended, as the veteran may be eligible to receive VA
benefits but just at a reduced rate. A waiver of the
indebtedness would result in an unjust enrichment to the
veteran in that he did receive benefits to which he was not
entitled. Finally, there is no evidence that the veteran
relinquished a valuable right or incurred legal obligation in
reliance of the benefit. Standing alone, these elements are
not felt to be of such importance in this case as to warrant
a denial of waiver.
In sum, the circumstances in this case indicate a need for
reasonableness and moderation in the exercising of the
Government's right to collect the debt charged to the veteran
in light of the undue financial hardship that repayment would
cause the veteran. Based on the Board's review of the undue
hardship element pertaining to the principle of equity and
good conscience, as set forth in 38 C.F.R. § 1.965(a) (2007),
the Board is persuaded that the Government should forgo its
right to collection of the indebtedness in this instance.
Accordingly, the Board concludes that recovery of the
overpayment would be against equity and good conscience. The
Board finds that when all of the elements are weighed in this
case, the claim appears to be at least in equipoise. See 38
U.S.C.A. § 5107 (West 2002 & Supp. 2006). In Gilbert v.
Derwinski, 1 Vet. App. 49 (1990), the United States Court of
Appeals for Veterans Claims, hereinafter the Court, stated
that "a veteran need only demonstrate that there is an
'approximate balance of positive and negative evidence' in
order to prevail." Because the evidence is in equipoise,
and since the appellant is supposed to be afforded the
benefit-of-the-doubt, the Board concludes that waiver of
recovery of the overpayment of compensation dependency
benefits in the amount of $15,004.00 (US dollars) is in
order. 38 U.S.C.A. § 5302(a) (West 2002); 38 C.F.R. §§
1.963(a), 1.965(a) (2007).
ORDER
Entitlement to a waiver of recovery of the overpayment of
compensation benefits in the amount of $15,004.00 (US
dollars) is granted.
____________________________________________
F. JUDGE FLOWERS
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs